Pedro Colaco, CEO and president of GuestCentric, explains how hotels can improve their return on investment from marketing on Google and other online channels.
The tail-end of 2019 saw Google become more aggressive with its advertising tactics to reach the online travel market. Pushing down free search listings to make room for more paid results led to increased competition for that real estate, disrupting OTA [online travel agent] dominance.
As OTAs spend less on Google campaigns during the economic downturn, what does this mean for your hotel’s positioning on Google’s search engine? Should hotels invest in Google meta-search, or could Google be your hotel’s worst best friend? Read on to find out.
Google disrupts OTA dominance, but do hotels stand a chance of competing?
Historically, OTAs ruled Google’s search engine results through optimised content and pay-per-click advertising. But in the last few months of 2019, Google started placing more ads at the top of the search engine and pushing down free organic listings from OTAs. This led to substantial customer acquisition costs for OTAs, which in turn had a ripple effect on hotels’ ability to rank high on Google’s search results.
Regardless of the disruption, OTAs still had much bigger budgets behind them and thus stood a better chance of maintaining the top spot on Google. However, the economic downturn of the pandemic has led to reduced investment in Google.
In April 2020, Bookings.com announced that it would reduce Google ad spending from US$4 billion in 2019 to between US$1 billion and US$2 billion in 2020. Expedia has also cut its Google marketing budget to less than US$1 billion in 2020, down from US$5 billion in 2019.
Google – your hotel’s worst best friend?
With reduced investment from OTAs, it would seem hoteliers and other competitors could be empowered to compete on Google. Hoteliers have also been given the keys to managing the distribution of their inventory directly on the Google platform. But what will happen when the upturn comes, and OTAs revert back to heavily investing in Google campaigns?
Although the economic downturn has seemingly levelled the playing field for hotels to compete, Google will ultimately continue to favour the highest bidder. Will independent hotels – with less resource and financial leverage – stand a chance against OTAs when bidding returns to pre-pandemic levels?
The silver lining is that in parallel with paid advertising, Google has been strengthening its Google My Business tools to give visibility to business owners. Furthermore, more guests are reaching out to hotels directly following a disastrous tug-of-war with OTAs for refunds.
Hoteliers should focus on both strengthening their business’s online visibility and delivering value to prospective guests who visit the hotel website.
The next step for hoteliers
Google is likely to expand its foothold on the travel industry, either by acquisitions or by bringing competitors to the edge of irrelevance. The trend is unlikely to revert, so it’s time hoteliers wake up from their meta-search-centric approach and start investing where the volume (and return on investment) is.
Below is a short summary of our recommendations:
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Optimise your hotel website and booking engine for mobile: our latest Hotelier Pulse research reveals that mobile makes up 30% of all hotel bookings. Mobile booking increased dramatically during the pandemic, and your digital sales and marketing tools must be optimised to meet the demand and increase booking conversion.
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Stimulate shopping behaviour on your hotel website and booking engine: it is vitally important that both your website and booking engine are optimised for direct. A few ways you can optimise include featuring pictures with your special offers, ensuring both website and booking engine are mobile-friendly, and featuring shopping activation / recovery widgets. For example, our research shows that including shopping activation and shopping recovery widgets can lift direct bookings by up to 60%.
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Be smart about your bidding: Google Hotel Ads campaigns are very sophisticated, with hundreds of variables and, very likely, this complexity and sophistication will increase with the upcoming Hotel Ads/Ads merge. Rate leakage is one of the main reasons why many campaigns underperform, so bidding should be very dynamic, based on your future rates, availability and feeder market depending on seasonality.
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Continuously update and engage with Google My Business: make sure your Google My Business listing is always up to date, as this is the primary entry point for most Google users. Answer each user’s questions on Google My Business and reply to the Google reviews. If you have time only for one platform, then drop Tripadvisor and focus on the Big G.
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Diversify your traffic channels: focus on other aspects of digital marketing to drive direct bookings, such as social media referrals, influencer marketing and user-generated content.
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Most importantly, never lose sight of the customers’ experience at all stages of their interaction with your hotel. During this time where every guest counts, referrals are your friend.
This is an edited version of an article that appeared on Hotel Technology.
Pedro Colaco is the CEO and president of GuestCentric, which he co-founded in October 2006. He boasts a proven track record of driving successful product development, marketing, sales and channel management efforts in the global market. Prior to his current role, he was vice president of product management and marketing at Corvil, a software start-up funded by Apax Partners and Cisco Systems.
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